Sunday, February 22, 2009

The reduction of the debt burden of insolvent private agents (households and non-financial companies

Roubini warns of 'sovereign' bank failure

Nouriel Roubini, the New York University professor who predicted the global credit crisis, said a government-backed bank ''may crack'' as officials try to bail out their financial systems. ''The process of socializing the private losses from this crisis has already moved many of the liabilities of the private sector onto the books of the sovereign,'' Roubini wrote on his Web site today. ''At some point a sovereign bank may crack, in which case the ability of the governments to credibly commit to act as a backstop for the financial system -- including deposit guarantees -- could come unglued.'' ''The global economy is now literally in free fall as the contraction of consumption, capital spending, residential investment, production employment, exports and imports is accelerating cont

Posted by troy @ 07:03 AM (828 views)
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One thought on “The reduction of the debt burden of insolvent private agents (households and non-financial companies

  • Ireland would seem like a prime contender for the title of Country Most Likely To Default On A State-Guaranteed Bank.

    I don’t much like Roubini’s proposed solution of printing our way out of debt. There must be another way!

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